The Federal Trade Commission (FTC) has issued a damning new report on the data collection and use practices of Twitch, Meta, YouTube, X, Snap, TikTok, Discord, Reddit and WhatsApp. The findings indicate that these platforms engage in “vast surveillance of consumers in order to monetize their personal information while failing to adequately protect users online, especially children and teens.”
It’s not exactly startling news; by now, most policymakers and consumers are aware, at least at a high level, that social media and streaming services have been collecting user data for years, often without clear indications that they were doing so or opportunities for users to opt out. Various congressional bodies have brought leaders at these and other companies in for a series of hearings on these concerns, as well as the mental impact of the platforms on children and teens. Not much has come out of those hearing so far, beyond a few good Mark Zuckerberg memes, although the Senate did pass two child online safety bills in July that continue to work their way through the House.
The FTC’s report is likely to light fires under those efforts. It’s based on responses to a series of orders issued by the agency back in December 2020, asking for information about how the companies collect, track and use personal and demographic information; how they determine which ads and other content are shown to consumers; whether and how they apply algorithms or data analytics to personal and demographic information; and how their practices impact children and teens.
Not surprisingly the report found that the nine companies in question collected and could indefinitely retain troves of data. As the report outlines, the business models of many of these companies actually incentivize the mass collection of user data for monetization, in particular through targeted advertising, which accounts for most of their revenue. The FTC’s conclusion is that this financial model is “in tension” with user privacy. The risk to users’ privacy is exacerbated because users and even non-users (acquired through data brokers and other means) have little or no way to opt out of how their data is used by what are often automated systems.
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Additionally, the report concludes that social media and streaming services don’t adequately protect children and teens, in many cases treating teen users the same as adult users, with no account restrictions.
“While lucrative for the companies, these surveillance practices can endanger people’s privacy, threaten their freedoms and expose them to a host of harms, from identity theft to stalking,” said FTC Chair Lina Khan in a statement. “Several firms’ failure to adequately protect kids and teens online is especially troubling. The report’s findings are timely, particularly as state and federal policymakers consider legislation to protect people from abusive data practices.”
The FTC made a number of recommendations to policymakers and companies on a more consumer-friendly path forward, including:
- Passing comprehensive federal privacy legislation to limit surveillance, address baseline protections and grant consumers data rights;
- Companies should proactively work to limit data collection, implement concrete and enforceable data minimization and retention policies, limit data sharing with third parties and affiliates, delete consumer data when it is no longer needed and adopt consumer-friendly privacy policies that are clear, simple and easily understood;
- Companies should stop collecting sensitive information through privacy-invasive ad tracking technologies;
- Companies should carefully examine their policies and practices regarding ad targeting based on sensitive categories;
- Companies should address the lack of user control over how their data is used by systems as well as the lack of transparency regarding how such systems are used, and also should implement more stringent testing and monitoring standards for such systems;
- Companies should not ignore the reality that there are child users on their platforms and provide additional safety measures for children;
- Companies should provide greater privacy protections for teens; and
- Congress should pass federal privacy legislation to fill the gap in privacy protections provided by COPPA (the Children’s Online Privacy Protection Rule, passed in 2000 and updated in 2013) for teens over the age of 13.
Online privacy is just one of many irons the FTC has in the fire at the moment, which also include court battles to block a series of high-profile mergers, banning fake online reviews, seeking to ban non-compete clauses, eliminating junk fees and removing opaque subscription practices. Retail TouchPoints recently spoke with the Director of the FTC’s Office of Public Affairs to find out more about the agency’s current focus and broader workings — check out that interview here.
